Lawmakers to Retry Cash Balance Plan

The contentious plan to revamp the state’s floundering retirement systems was overturned in State Supreme Court on Friday.

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The high court knocked down the law not because of content, but because of how it passed. State law requires a supermajority for this kind of bill to progress. The legislature sent this one to the governor’s desk with only the majority’s approval.

Sen. Elbert Guillory chairs the Senate Retirement Committee and carried the cash balance plan through the Senate in last year’s session.

Guillory says the bill would have gotten more votes if he and Rep. Kevin Pearson, who sponsored the bill on the House side, had done a better job educating lawmakers.

"Many legislators don’t know yet, they have not been exposed to how dire this situation is," Guillory said. "I certainly didn’t know until I was placed on the Retirement Committee. I’m horrified now, I’m afraid for the future of Louisiana."

Guillory said he and Pearson will try another version of the cash balance plan when the legislature convenes again next March.

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Representative Kevin Pearson, chairman of the House Retirement Committee, has prepared a bill that he hopes will improve the cash balance plan – despite that the plan is the subject of ongoing litigation. The plan was overturned in court because it didn’t get a two-thirds vote in the legislature.

If the State Supreme Court does uphold the decision, the bill could be used as a safety-net, and the cash balance plan could be brought before the legislature a second time.

Key pieces of Governor Bobby Jindal's pension reform have started to make their way through the legislature.

A bill that aims to change retirement eligibility heads to the full House tomorrow for further debate. Meanwhile, legislation to create a cash-balance plan for retirees and raise employee pension contribution by 3-percent is slated for the full Senate floor in the coming weeks.

Jeffrey Sadow is an Associate Professor of Political Science at LSU Shreveport. He is also the author of the Louisiana politics blog "Between The Lines".

Sadow spoke with WRKF's Ashley Westerman via telephone about the political dynamics at play in order to get pension reforms passed.